Jewett-Cameron Trading Company: A Solid Performer Aggressively Repurchasing Shares ($JCTCF)

Jewett-Cameron Trading Company Ltd. (NASDAQ: JCTCF) operates in four industries: industrial wood products; lawn, garden and pet supplies; seed processing and sales; and industrial tools and clamps. The company has been aggressively repurchasing shares over the last two years, reducing its shares outstanding from 2,390,977 by 34% to 1,567,971 subsequent to the end of the recent quarter. Furthermore, insiders own 969,202 of these shares, or 62% of the company.  To paraphrase Peter Lynch, “there are many reasons insiders sell, but . . .

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G. Willi-Food International Inc: Shareholder Hacktivism? ($WILC)

Israeli food distributor, G. Willi-Food International Inc (NASDAQ: WILC) is frequently discussed among small cap value investors. The company has almost no debt, historically positive earnings and yet trades well below book value and not far above cash on hand. In September, the company announced that it would initiate a share repurchase program, but then just a few short months later, the company inexplicably announced it would terminate the same program to “focus its resources on developing its core . . .

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The Pros and Cons of Stock Buybacks

On Monday, Gregory Milano of Fortuna Advisors LLC and Whitney Tilson of T2 Partners LLC were featured in a Wall Street Journal article debating stock buybacks:

In one study, those that reinvested a higher percentage of their cash generation into capital expenditures, research and development, cash acquisitions and working capital delivered substantially higher total shareholder return than those that reinvested less.

The problem with buybacks is considerably compounded by poor timing: the propensity to buy when the price is . . .

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Do Firms Buy Their Stock at Bargain Prices?

To return cash to shareholders, firms choose between issuing dividends and repurchasing share. There are many reasons to choose to repurchase rather than issue dividends. For one, dividends are believed to be sticky, in that a dividend cut is taken as a sign of weakening fundamentals and often leads to a sell-off in the market. Few companies follow a dividend policy that mimics corporate earnings or free cash flows. Second, when executives believe their company’s share price to be unrealistically . . .

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